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POLITECNICO DI TORINO
Corso di Laurea Magistrale in Ingegneria Gestionale (Engineering and Management)
Tesi di Laurea Magistrale
Manufacturing Warehouse Analysis by Lean Production Methodologies
Candidate
Chiara Garberoglio Supervisor
Prof.ssa Anna Corinna Cagliano Company Advisor
Dott. Kishore Chalakkal
Academic year 2021-2022
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Alla mia Famiglia e a chi per me c’è stato.
A mia madre che mi ha insegnato a essere forte.
A mio padre che mi ha spinta a inseguire i miei sogni.
A Lorenzo che ha deciso di condividere il cammino con me.
A mia sorella che non mi ha mai lasciata sola.
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Summary
Introduction ... 9
1 Business Process Modelling and Lean Production ... 11
1.2 Business Process Modelling (BPM) ... 11
1.2.1 Business Process Model and Notation (BPMN) ... 11
1.2.2 BPM Lifecycle and utility of business models ... 15
1.3 Lean Manufacturing ... 16
1.3.1 5W analysis ... 20
1.3.2 5S analysis ... 21
1.4 Lean Production and Business Process Modeling ... 22
1.5 Process mining as possible future ... 23
1.5.1 Different types of process mining ... 24
2 Company presentation ... 26
2.1 Dayco ... 26
2.2 Mission and strategies... 26
2.3 Products ... 27
2.4 Hybrid system solutions ... 29
2.5 San Bernardo di Ivrea plant ... 29
3 Warehouse process ... 31
3.1 Introduction ... 31
3.2 Incoming ... 35
3.2.1 Receiving ... 35
3.2.2 Return request ... 50
3.2.3 Data conversion and triangulation ... 51
3.2.4 Other subprocesses... 51
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3.3 Production warehouse ... 52
3.3.1 Prototype department order ... 52
3.3.2 Item production schedule ... 54
3.4 Shipping preparation area ... 59
3.4.1 End product to be allocated in the warehouse ... 59
3.4.2 Shipping request ... 60
3.4.3 Request for data conversion ... 66
3.5 Shipping ... 67
4 Analysis of Dayco processes and possible solutions ... 73
4.1 Analysis of Dayco warehouse ... 73
4.1.1 Communication ... 73
4.1.2 Allocation task and accuracy ... 75
4.1.3 Manual task and personnel... 77
4.2 Inefficiencies in the incoming area ... 77
4.3 Bizagi application as a possible solution ... 83
4.3.1 Model process ... 85
3.5.2 Model data ... 85
4.3.2 User interface ... 89
4.4 Other projects ... 100
5 Conclusions ... 101
5.1 Benefits for the company ... 101
5.2 Limits of the work ... 102
5.3 Ideas for the future ... 103
Appendix A ... 105
A.1 Fill data to the fake database ... 105
A.2 General information and check the schedule ... 106
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A.3 Number of packages in the delivery note ... 106
A.4 Quantity of material to be returned ... 107
A.5 Changes in quantity of the delivery note ... 108
A.6 Request for quantity validation ... 108
A.7 Accept exceeding quantity ... 109
A.8 Flag check ... 109
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Introduction
In a world where interconnectivity and smart automation are every day increasing, business intelligence and process mining are becoming more and more important to connect the high amount of data generated to the real processes of the companies. Moreover, when adaptability and responsiveness are as fundamental as today, the supply chain plays a primary role in the optimization of the company operations and so its processes deserve higher attention to be managed.
With its history of industry-leading first through innovative and efficient solutions, Dayco cannot avoid innovating its supply chain processes. Dayco is the case study company of this thesis and it is a global leader in the research, design, manufacturing and distribution of engine drive systems and aftermarket services for the automotive sector.
To start a business project management analysis, a traditional business process map could be useful to have a better idea of how the processes flow and to identify the inefficiencies that must be avoided.
Since Dayco adopts the Lean Production principles to manage each aspect of the company, the analysis of the process is developed through Lean Production tools such as 5W and 5S analysis.
The first chapter of the thesis analyses the main principles of Business Process Management and of Business Process Modelling (BPM) as well as the tools of Lean Production that will be employed in the thesis.
The second chapter introduces Dayco company describing its products as well as its mission and strategies which are fundamental to understanding why an innovative and challenging project such as process mining could be implemented.
In the third chapter of the thesis, a traditional formal process model of the Dayco warehouse is developed. Each area of the warehouse is mapped through the Business Process Model and Notation (BPMN) to investigate how the material flows in the plant.
The fourth and last chapter analyses the process model of the incoming area of the warehouse.
From this analysis, the inefficiencies of the procedure are identified and analyzed through the 5W and 5S methods of Lean philosophy. A possible solution to increase the quality of data logs and to solve the process inefficiencies is proposed. Using the BPMN language and the Bizagi software a low code application is developed.
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To conclude, the advantages of the application are analyzed together with the limits. Thanks to this study, it is possible to see how the new software application cannot substitute the in-use information system but it could be a powerful tool to keep the process under control and to optimize it.
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1 Business Process Modelling and Lean Production
In this first chapter of the thesis, the main principles of the Business Process Modeling and Business Process Model and Notation are introduced. Then the focus is moved on Lean Production methods and tools such as 5S and 5W. Finally, the concept of process mining is presented as a possible method to analyze business processes in the future.
1.2 Business Process Modelling (BPM)
Business process management is based on the idea that each product provided to the market is the outcome of many activities that take one or more inputs to create an output valuable for the customer (Weske, 2012). Starting from this assumption it is possible to give to business process management the following definition.
Business process management includes concepts, methods, and techniques to support the design, administration, configuration, enactment, and analysis of business processes (Weske, 2012).
To analyze and manage a business process, this one must first of all be clarified with an explicit representation of its activities. Traditionally, the business process representations are manually depicted by the company’s personnel, but to achieve a better result it is possible to employ business process management systems.
A business process management system is a generic software system that is driven by explicit process representations to coordinate the enactment of business processes. (Weske, 2012)
For the representation of a business process through a Business Process Management system, a graphical notation must be adopted. Even if there are many graphical notations, they are quite similar. To the scope, the Business Process Model and Notation (BPMN) is introduced as the current the facto standard of process modeling (Patig & Casanova-Brito 2011).
1.2.1 Business Process Model and Notation (BPMN)
The Business Process Model and Notation (BPMN) aims to represent a process diagram through the use of flow charts for the description of business operations. BPMN is designed to be machine- readable for the execution environment of the process, but at the same time is easy to understand (Campos & Oliveira, 2011) as can be seen in Figure 1. BPMN was developed under the coordination of Object Management Group and it is in its version 2.0 (OMG, 2010).
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Figure 1: Example of business process mapping with BPMN
The BPMN notation is based on four object categories as illustrated in Figure 2 (Weske, 2012):
• Flow objects
• Artefacts
• Connecting objects
• Swimlanes
Figure 2: BPMN categories of elements (Weske, 2012)
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The main elements of each category are explained in Table 1.
Flow objects
Events Anything relevant that happens during the course of the project.
Activities Work or tasks carried out by members of the organization.
Gateways Split and join behavior of the sequence flow.
Artefacts
Data Object
Documentation of data used in the process as paper documents, electronic information, physical artefact.
Group Visual mechanism to group elements of a diagram informally.
Connecting objects
Sequence flow Specify the ordering of flow objects.
Message flow Flow of messages between business partners.
Association Link artefacts to elements in business process diagrams.
Swimlanes
Pool Container of a single process.
Lane
Sub-partition within the process that represents functional areas that may be responsible for tasks.
Milestone Indicate different stages during the process.
Table 1: BPMN elements
The process starts with a starting event that triggers a sequence of activities that ends with an end event. There are many types of gateways that are useful to slit and join the process flow, to identify parallel paths or exception flow as illustrated in
.
Figure 3: Gateway types in BPMN (OMG, 2011)
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As for the gateway, there are many types of activities and events as can be verified respectively in Figure 4 and in Figure 5.
Figure 4: Task (activity) type in BPMN (OMG, 2011)
Figure 5:Event type in BPMN (BPM offensive Berlin, 2011)
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1.2.2 BPM Lifecycle and utility of business models
Process models and Business Process Management play an important role in large organizations where they are employed for more than one scope (Aalst, 2016):
• Insight: analyze the process from different points of view
• Discussion: use the model as a base in managerial discussion
• Documentation: certification and training purpose
• Verification: find errors in the procedures
• Performance analysis: simulation techniques can be implemented to evaluate KPI
• Animation: imagine different scenarios
• Configuration: models can be used to configure information systems
The business models can be formal or informal. Formal models are employed to analyze the process, while informal models are high-level processes used during managerial discussions (Aalst, 2016).
While formal models are too detailed to be understood by the stakeholder, informal ones are vague.
In both cases, it is important to reflect on the quality of the model created and in particular on their alignment with reality. Indeed, many hand-made models are too idealized and do not represent the real processes and so they cannot be trusted (Aalst, 2016).
Business Process Management life-cycle in Figure 6 describes the different phases needed to manage a business process.
Figure 6: Business Process Management life-cycle (Aalst, 2016)
First of all, the process is designed in the design phase and then it is transformed into a running system in the configuration/implementation phase. After the system is able to support the implemented process, the monitoring phase starts. In this phase, the process flow is monitored
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through a series of KPIs that are useful to identify inefficiency in the process that can be fixed in the adjustment phase. With the diagnosis/requirement phase the eventual changes in the process are evaluated and implemented. If radical changes to the process are needed the redesign phase triggers another cycle (Aalst, 2016).
In the first phases of the Business Process Management life-cycle, the focus is on the process models, while in the enactment/monitoring phase and in the diagnosis/requirements phase the data play a more important role. Thanks to process mining it is possible to deeply link all the phases of the Business Process Management life-cycle analyzing the data collected by the information system to have a better view of the process.
1.3 Lean Manufacturing
Lean Manufacturing is a production method whose aim is to reduce waste to increase manufacturing quality and efficiency. The term Lean was first employed in the 80s by the International Motor Vehicle Program of the Massachusetts Institute of Technology to describe the production method developed by Toyota and known as Toyota Production System (Aalst, 2016).
The Toyota Production System was developed by Sakichi Toyoda and Taiichi Ohno in the 50s and it is based on the maximization of the value offered to the customer. Everything that does not create value is a muda, a waste that must be eliminated to optimize the operations.
The most important principle of the Lean Philosophy is the attention paid to the customers. the customer plays a fundamental role in the company because every activity performed is justified only if it brings value to the customer. For value, it is intended everything the customer is willing to pay.
Communication with the customer has primary importance to investigate the customer needs and the activity value.
Also, the personnel know-how and its contribution is necessary to implement a shared mission and strategy able to align the effort of all actors involved in lean manufacturing.
Since no process is perfect and can always be improved (Ohno, 1978), for the lean philosophy it is important to continuously improve the company activities (kaizen principle) to reach more effective results.
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Lean Thinking is based on five principles (Workman & Jones, 1996) :
• Identify value
• Map the value stream
• Create flow
• Establish pull
• Seek perfection
Value is the starting point of Lean Thinking and it can only be defined by the customer.
Value is a specific product (a good or a service, and often both at once) which meets the customer’s needs at a specific price at a specific time. (Wormack & Jones, 1996).
So the value is created by the producer and is sustained in the long term by the customer.
Once the customer’s needs and the value of the product have been defined, it is important to identify the specific actions required to bring the value to the customer and therefore to produce the good. This sequence of action is defined as Value Stream. When all the tasks needed to create a good have been mapped in the value stream map (VSM), it will be possible to divide them into three groups:
• Activities that bring value
• Type one muda, activities that create no value, but are necessary and unavoidable
• Type two muda, activities that create no value and can be avoided
Through the analysis of the VSM, the process muda can be detected and eliminated.
Once the type two muda has been eliminated, the remaining activities must be rearranged to keep the process flow. This activity is done taking into consideration the whole process together and not focusing on the single departments of the company.
In short, things work better when you focus on the product and its needs, rather than the organization or the equipment, so that all the activities needed to design, order, and provide a product occur in continuous flow. (Wormack & Jones, 1996)
When the flow is introduced the product time to market significantly reduces as well as throughput time (Wormack & Jones, 1996). Therefore, it is possible to implement a pull strategy where the production is not defined by the forecasted demand, but by the real demand of the customer.
Moreover, the demand of the customer tends to become much more stable when they know that their request will be satisfied in a short time (Wormack & Jones, 1996).
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Finally, through the kaizen principle, it is possible to seek perfection specifying value more accurately and implementing a new and more effective way to make the process flow by deleting wastes.
Since the aim of Lean Thinking is to eliminate muda, it is important to deeply understand how wastes are classified (Ohno, 1978):
• Overproduction
• Work in progress - Inventory
• Transportation
• Waiting and idle time
• Movement
• Inappropriate resources and process
• Failure and scraps
The overproduction waste is generated every time the company does not produce according to the pull principle and Just-In-Time but with a push strategy. In the push model the company produces based on the forecast demand and then pushes the products into the market. On the other side, the pull principle is based on the actual demand: thanks to the Just-In-Time principle the company is able to adapt the volume of production to the customer demand. Unlike the push model, a pull model avoids overproduction and excess inventory. The overproduction waste is also generated when the product is produced too soon or faster than required by the next process. Ohno considered the overproduction as the worst waste since it generates other wastes such as the waiting one for the big size of the batch and the high inventories.
The work-in-progress warehousing waste is based on keeping unnecessary raw materials, parts or work in progress (WIP). It is generated by overproduction and by the push principle. Moreover, high inventories increase the company capital and increase costs.
Transportation waste is the unnecessary movement of material without adding value. It could be generated when the product is not stocked near the place of use, so it must be moved back and forth in the plant without generating any value.
Waiting waste occurs when there is a production line stoppage or the worker must wait for the material without being productive. It can be generated by a high level of WIP.
The movement waste is generated when the workplace ergonomics is not optimized and the worker must walk, reach or twist without a real reason.
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The inappropriate resource and process include all wastes generated by overprocessing as endless product or process refinement, process bottlenecks, redundant approvals and unnecessary information. It is mainly caused by inefficient procedures and lack of customer inputs.
The scraps and failures are all those parts that deviate from the standards of the products and need to be repaired and reworked to be employed. This waste is mainly generated by the lack of training and standard and by incorrect information.
Dayco decided to consider one more waste with respect to the traditional ones proposed by Ohno (Errore. L'origine riferimento non è stata trovata.): talent waste. This waste is generated whenever Dayco does not support his personnel in growing their skills and ability and when the sharing of knowledge, ideas and creativity is not encouraged. This could take the form of employees performing unnecessary work when their talent could be utilized in activities that add greater value as well as not considering employees’ abilities and feedbacks in the processes.
Figure 7: Dayco 8 wastes [1]
To ensure waste reduction it is important to develop a Just-In-Time methodology and automation (jidoka).
Just-in-time is a methodology to manage the production according to the pull logic of Lean Production. It is the customer who triggers the production and the company activities. For this reason, the inventory must be kept as low as possible to produce just what was already sold and to
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satisfy the customer's needs. The Just-in-Time principle aims to fix the most important problems linked to mass production. The production of big batches is sustained by a large number of stocks that take up the warehouse space, increase costs and tied up the company’s capital. Moreover, the mass production system is not able to meet customer needs for tailored products (Holweg, 2007).
To ensure the application of the Lean principles, some instruments have been developed as 5W and 5S analysis.
1.3.1 5W analysis
The 5WHYS technique is useful to deeply analyze the cause of wastes and inefficiencies. The operator must ask himself the question “why?” five consecutive times. This will enable the identification of the problem's root cause and the corrective actions that will be applied can be more effective.
This tool is very easy and rapid to use, furthermore it can be integrated into the mindset of every problem solver and employed in every situation. Ohno’s (1988) most famous example for
illustrating the 5-whys analysis is the following:
Question 1: Why did the robot stop?
Answer: The circuit is overloaded, causing a fuse to blow.
Question 2: Why is the circuit overloaded?
Answer: There was insufficient lubrication on the bearings, so they locked up.
Question 3: Why was there insufficient lubrication on the bearings?
Answer: The oil pump on the robot is not circulating sufficient oil.
Question 4: Why is the pump not circulating sufficient oil?
Answer: The pump intake is clogged with metal shavings.
Question 5: Why is the intake clogged with metal shavings?
Answer: Because there is no filter on the pump
In this example, the root cause of the problem is the lack of a filter on the bump that can be installed to solve the problem. Anyway, it is not always easy to identify the root cause of the problem or a possible solution.
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1.3.2 5S analysis
The 5S method aims to reduce waste by cleaning the workspace and increasing its productivity (Al- Aomar, 2011). It is based on five principles:
• Seiri – Sort
• Seiton - Set in order
• Seison – Shine
• Seiketsu – Standardize
• Shitsuke – Sustain
With the sort step, the useful objects and activities are separated by the useless ones. First of all the working area and team must be identified, then the object or activity must be divided in three different groups:
• Useful object
• Undefined object
• Useless object
The undefined objects are those that could be potentially useful but are not often employed. A ret tag specifying a due date is attached to undefined objects (Figure 8). If the object is not employed before the due date, it is moved to the useless object group.
The step set in order aims to organize the useful items to be easily available and more visible. To the scope, the 4R principle can be employed: the Right item in the Right place, at the Right time and in the Right amount.
Moreover, the more employed object must be stored near to the user, while the items that are just often used can be located outside the working area.
In the shine step, a cleaning process is implemented to keep the working area clean of useless objects. Moreover, the tools and the machinery employed are continuously inspected to assure the correct functioning.
The standardize step aims to set the standard of what developed in the previous steps. The standard must be visible and easily understandable and consultable.
Figure 8: Red tag [1]
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Finally, the result reached with the previous steps must be maintained and sustained. It is necessary to implement periodic audits of the working area involved in the 5S project and to continuously update the standards fixing KPIs and evaluating trends. To the scope, a suggestion box can be positioned near the working area to collect inputs and suggestions from the workers.
1.4 Lean Production and Business Process Modeling
One of the main principles of Lean Production is the map of the value stream and process modeling plays an important role in identifying all the activities that take place in the product creation.
Just as activity that can’t be measured can’t be properly managed, the activity necessary to create, order, and produce a specific product which can’t be precisely identified, analyzed, and linked together cannot be challenged, improved (or eliminated altogether), and, eventually perfected.
(Wormack & Jones, 1996)
The process modeling helps to identify and link together the activity needed to develop a product.
Moreover, associating to the process model the run time it is possible to evaluate how the process flows and the amount of time that is not associated with the creation of value and therefore is a waste of waiting. Also, it is possible to understand how the material is moved across the plant and the corresponding waste of transportation.
The process modeling is also the base of the define phase of the Lean Six Sigma projects. Lean Six Sigma is a structured approach to improve a process through variability reduction (Nandakumara &
Saleeshyab & Harikumarc, 2018). The Lean Six Sigma methodology is based on the DMAIC cycle:
• Define – the process to be analyzed, the customer needs, team and time
• Measure – data of the process
• Analyze – the causes of the inefficiency
• Improve – the current condition through different solutions
• Control – the improved process to maintain the gains
The definition of the process is often done through process modeling tools such as BPMN or flow chart.
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1.5 Process mining as possible future
Process mining is a science able to link end-to-end processes and event data created by every informatic source. For this reason, it could be considered as a future development of the process mapping project discussed in this thesis. It could enable to overcome the limits of the traditional business process modeling creating a more objective result based on data and not on the ability of the analyst.
Process mining research started in 1999 at Eindhoven University of Technology in the Netherlands thanks to the efforts of the computer scientist Wil van der Aalst. The discipline of process mining can be seen as the bridge between process science and data science (Aalst, 2016).
Process science is a discipline that “combines knowledge from information technology and knowledge from management science to improve and run operational processes” (Aalst, 2016). It mainly focuses on modeling processes rather than learning from the real data that can be mined from every organization's information system. To mind the gap, data science is an interdisciplinary field that aims to extract knowledge from unstructured and structured data creating value (Donoho, 2015). While data science is a powerful instrument to mine and manipulate data, it does not consider end-to-end processes. Only combing data and process science it is possible to analyze the processes exploiting the growing availability of data (Errore. L'origine riferimento non è stata trovata.9).
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Figure 9:Process mining is the bridge between data science and process science (Aalst, 2016)
1.5.1 Different types of process mining
Event logs can be employed to implement different types of process mining:
• Discovery process mining
• Conformance process mining
• Enhancement process mining
The discovery process mining is based on the idea to use discovery techniques that elaborate data logs to create a model without using any a-priori information (Aalst, 2016). Given a large amount of event logs an algorithm such as the α-algorithm transforms event logs in a process diagram without using any additional knowledge.
On the other side the conformance process mining starts from an existing process model and analyzing its data log, it checks its conformity to reality. Conformance checking can be used to evaluate how the model deviates from the real cases and if procedures are performed as they should.
The enhancement process mining aims to improve and extend an a-priori model using information contained in the event log. One example of enhancement is repairing the model to better conform to reality or the extension to add new perspectives to the existing model with information as resources or quality metrics.
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The most important perspectives are
• Organizational perspective: resources and organizational units
• Case perspective: property of cases i.e. value of data element corresponding to the activities
• Control-flow perspective: the ordering of activity
• Time perspective: time and frequency of events
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2 Company presentation
In the second chapter, Dayco company will be presented highlighting its mission and products.
2.1 Dayco
Dayco is a global leader in the research, design, manufacturing and distribution of engine drive systems and aftermarket services for the automotive sector. Its headquarter is located in Roseville, Michigan in the USA, and the company operates in more than 22 countries all over the world as illustrated in Figure 10.
Figure 10: Dayco worldwide locations [1]
With more than 110 years of experience, Dayco has a history of industry-leading firsts that have improved the effectiveness through innovation, efficiency and impact of products in ways that are continuously benefiting the customer. Thanks to its values and its capability of delivering effective drive systems, Dayco has continuously improved the technology in the automotive market and has emerged as the leading global system solution provider for hybrid electric vehicles.
2.2 Mission and strategies
Dayco mission is to deliver innovative system solutions that move Original Equipment and Aftermarket customers forward, always.
Focusing on keeping promises and on the ability to deliver on time no matter the obstacles, Dayco has endured becoming stronger and more resilient. Dayco is able to meet customer-specific performance requirements thanks to its dedicated global team that respects one another, shows humility through continuous learning and acts like owners in everything they do.
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Dayco principles and strategies are well explained in Figure 11.
Figure 11: Principles and strategies [1]
Thanks to its high attention to quality and customers’ needs, Dayco awarded many certifications such as Ford “Q1 Certification” and “Supplier Quality Excellence Award 2020 from General Motors.
According to its mission and strategies, Dayco gives great importance to lean production methods which are applied to optimize the production and the supply chain.
2.3 Products
With more than 50 locations in 20 countries, Dayco continues to globalize its operations to provide a high-quality service experience, from manufacturing to delivery to technical support. Dayco collaborates on product development building strong relationships to meet the high-quality standard of its customers. The essential engine products produced by Dayco minimize noise, vibration and harshness delivering exceptional performance, efficiency and economy.
Dayco has a wide product portfolio that can be divided into three main families:
• Original equipment manufacturer (OEM) as belts and hybrid solutions for companies in the automotive sector as FCA, Volkswagen, Audi, Maserati, Ford, Iveco.
• Original equipment spares (OES) for its big customers.
• Aftermarket (AM) products ideated by Dayco for automotive, truck, construction, agricultural and industrial applications.
Dayco offers to its customer both light and heavy-duty original equipment, paying attention to the different needs of each product family. Since 1979s, Dayco has been a leader in belt and tensioner
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technology implementing manufacturing strategies that match materials to specific application needs.
Figure 12: Belt and tensioner [1]
As a complement to its belts and tensioners shown in Figure 12, Dayco provides additional products such as pulleys and idlers in stamped and formed plastic, steel and powdered material as well as dampers, decouplers and friction wheel.
For the aftermarket sector, Dayco offers a wider range of products able to satisfy the needs of different industries as illustrated in Figure 13.
Figure 13: Aftermarket product application [1]
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2.4 Hybrid system solutions
Dayco Hybrid System Solution aims to provide energy saving systems for P0 Mild Hybrid Powertrains as a consequence of the increasing E-Machine power
The mission of Hybrid Solution research is to improve fuel saving, CO2 reduction and the durability of P0 Hybrid systems. Dayco purpose of offering a 12 to15% emissions reduction and life-long service as the next standard in the field.
To achieve the goal, Dayco is providing intelligent Control Logic designed to minimize CO2 emissions and to guarantee the durability of components. It aims to provide more integrated solutions to optimize the performances of electric machines, pursuing smart system management.
The most recent products on the powertrain division are the twin tensioner for hybrid vehicles (Figure 14) and viscous crankshaft decoupler.
Figure 14: Twin tensioner [1]
2.5 San Bernardo di Ivrea plant
In Italy, Dayco counts four manufacturing plants and two distribution centers located in Piemonte and in the industrial area near Chieti in Abruzzo.
San Bernardo di Ivrea manufacturing plant counts more than 520 workers and manufactures products in the national and international market. Due to the high volume of material handled, the plant warehouse is well developed and needs particular attention to be managed.
The warehouse of the Ivrea plant is divided into four macro-areas that are:
1. Incoming
2. Production warehouse 3. Shipping preparation area 4. Shipping
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In the incoming area, the material arrives and, after a primary quality check, it is registered in the information system and allocated in the raw material warehouse.
The production warehouse is a kanban area where the material is at the cost center of the production. When the kanban box is empty the material is moved from the raw material warehouse to the production warehouse both physically and on the information system.
When the end-product is ready, it is stored in the end product warehouse. Accordingly with customers’ orders, the end products are collected by the shipping preparation area staff and prepared for shipping.
Once the pallet is ready to be shipped and the customer’s truck arrives in Dayco, the end material is loaded up on the truck in the shipping area where also the documents required for the shipping are managed.
The information system of the Ivrea plant is AS 400. AS 400 is an application system created by IBM in 1988. It is a family of easy-to-use computers designed for small and intermediate-sized companies [9]. The AS 400 had become the most popular business computing system until it was substituted by the IBM eServer iSeries in 2000, a highly integrated business server for mid-market companies.
To archive the documents, Dayco employs the Activeinfo software. Activeinfo is an information management system that is useful to archive documents online [7].
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3 Warehouse process
In the following chapter, the process of the Dayco warehouse will be mapped through the BPMN language. The aim of mapping the process as-is is to increase the awareness of the managers about what is really happening in the warehouse area and to try to optimize it. Also, it is useful to understand how the materials flow in the plant and how it is possible to keep them flowing as Lean principles suggest.
3.1 Introduction
The process is mapped through the Bizagi software. Bizagi is a free, effective business process mapping software developed by Bizagi company. Bizagi has more than one platform and in this thesis, the following ones have been employed:
• Bizagi Modeler enables organizations to model business processes in a central cloud repository to gain a better understanding of each step and identify process improvement opportunities to increase organizational efficiency [2]. The software use the BPMN language to map the process.
• Bizagi Studio enables business and IT teams to transform any business process and deliver end-to-end digital process automation across the organization. The platform’s powerful drag and drop interface makes automating Classic, Experience-Centric, Tactical or Ad-Hoc processes simple, creating personalized and contextualized experiences for knowledge workers [2]. Through this software, it is possible to create a mobile application with low code.
Through Bizagi software and BPMN language, it is possible not only to map the procedures of the Dayco warehouse, but also to deeply understand what tasks each actor performs and is accountable for. The BPMN diagram is a powerful tool to create ISL documents for the business training of Dayco personnel and to compile the job description. Having a clear process enables the HR employee to identify immediately who are the actors involved and how an eventual change in the procedures can impact their workload.
For each warehouse area, the main process is defined through the tasks that each actor must perform. For each task, there is a brief description and the indication of the task performer and who is accountable for the task as illustrated in Figure 15.
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Figure 15: Task description
When a particular process was repeated in the main process or was too complex to keep in the main diagram, a subprocess called by the main diagram was created. In Figure 16, it is possible to see how subprocesses are linked to each area of the warehouse.
Figure 16: Subprocess hierarchy
Incoming area
check integrity
delivery registration
delivery schedule
document correction
load up
production warehouse
collect material
prepare order
returned material
shipping preparation area
FCA
DAIMLER
VOLKSWAGEN
VOLVO
PSA
SCANIA
PERKINS
FORD
STANDARD
shipping area
prepare documents
check integrity
delivery registration
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The decision to create different diagrams for each area of the warehouse was led by the complexity of the process that otherwise would have been too difficult to read and this would have been in conflict to increase the awareness of managers about the procedures.
Even if the process is written in BPMN language, the focus is not on the interaction between the user and the information system but on the process itself. The majority of the tasks are performed without the support of the information system so to have a clear and broader framework of the process the BPMN was intended as a tool to easily understand the procedures and to give it higher visibility.
Great focus is also given to the material itself: it is always the material flowing through the warehouse that triggers the procedures. This choice was made for more than one reason:
• Give visibility to the transit of the material through the company
• Material is the real center where value is accumulated
• As it stands, the procedures are modeled on human resources.
Focusing the attention on the material more than on the human resources will be helpful to model the work of the resources on the needs of the material accordingly to the value stream map.
The warehouse of the Ivrea plant is divided into four macro-areas that are:
5. Incoming area
6. Production warehouse 7. Shipping preparation area 8. Shipping area
In the incoming area the material arrives and, after a primary quality check, it is registered in the information system and allocated in the raw material warehouse.
The production warehouse is a kanban area where the material is at the cost center of the production. The production warehouse is composed of shelves that can bear up to six pallets for each of the three levels. Every area of the shelves, kanban box, is assigned to the stock of a particular material. When the kanban box is empty the material is moved from the raw material warehouse to the production warehouse both physically and on the information system.
When the end-product is ready, it is stored in the end product warehouse. Accordingly with customers’ orders, the end product is collected by the shipping preparation area staff and prepared for the shipping.
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Once the pallet is ready to be shipped and the customer’s truck arrives in Dayco, the end material is loaded up on the truck in the shipping area where also the documents required for the shipping are managed.
The warehouse is composed of a traditional pallet racking system where the forklift can easily move, and a narrow aisle pallet racking. Narrow Aisle Pallet Racking (VNA) is an adaptation of standard pallet racking systems, but thanks to a high-density storage possibility, it makes it possible to increase the capacity of the warehouse without expanding the space. The compaction of the system is mainly generated by narrowing the work aisles, which can save up to 40% in space. To store the pallets in the narrow aisle pallet racking, VNA forklifts with rotating forks and floor guidance are employed to simplify operations.
Dayco warehouse does not have a well-defined activity layout. The different areas of the warehouse such as raw material warehouse, production warehouse and end product warehouse are mixed together so it is not possible to distinguish which material is stored in a particular rack. Some simple rules manage the allocation activity of the pallet in the racks:
• High rotation materials are stored in lower levels of the racking system
• Kanban shelves are signaled with a yellow adhesive tape on the rack and are located in the first three levels of the racking system
• The end product is allocated near the shipping preparation area
• Different areas of the racking system near the shipping preparation area are designated to specific customer
In this scenario, two kinds of actors can interact:
• Internal actors as Dayco personnel
• External actors as customer or supplier truck drivers Each area of the warehouse has its personnel composed by:
• Supervisor
• Warehouse worker
• Forklift driver
Moreover, a manager warehouse is present and there are some interactions with supply chain and quality departments.
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3.2 Incoming
The processes in the incoming area of the warehouse are many and they are triggered in different ways. The main processes are:
• Receiving of material from suppliers
• Return material to suppliers
• Data conversion
• Triangulation
3.2.1 Receiving
When the supplier truck arrives in front of Dayco gates, the incoming area forklift driver answers the doorbell and checks that the truck driver wears the personal protection equipment needed to enter in Dayco plant (Figure 17). If it is not the case, the forklift driver must ask the truck driver to wear the safety shoes and the high-visibility jacket and wait until this is done.
Figure 17: Check of personal protection equipment
If the incoming is not accepted for a long time due to delays in the incoming area or overload of work, the truck driver may decide to leave the Dayco plant without delivering the truckload. In this case, the company may occur in extra costs due to the disruption.
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Figure 18: Check destination and number of pallets
Later, the forklift driver checks the transportation documents to verify the truck destination and the number of pallets to unload (Figure 18). If the destination indicated in the document is not correct, the forklift driver must call the incoming area supervisor to manage the situation. The supervisor then must compare the delivery note with the truckload and contact the supplier to get more information. Usually, the situation is solved and the supplier must correct the delivery note, in extreme cases the truck is rejected and the process end.
Figure 19: Returnable packaging
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Sometimes the truck might be loaded with returnable packaging that a Dayco customer must give back to the company. In this case (Figure 19), the truck driver is invited to go to the packaging area of the warehouse where the packaging area forklift driver checks if that type of packaging is used by Dayco. Then, the forklift driver unloads the truck and checks that the quantity declared in the delivery note is coherent with the unloaded one. If the data do not coincide, a note on the document is written to claim the real quantity and a supply chain employee is informed.
After that, the integrity of the packaging is verified through the check integrity subprocess. The delivery note is then stamped as subject to inspection and signed by the packaging area forklift driver who positions the material in the packaging warehouse.
Finally, the incoming is registered through the record delivery subprocess and all paper documents are archived also in the Activeinfo database. With regular intervals of time the warehouse on the information system is emptied and the process end.
If the truckload is not packaging, two cases can be identified:
• The forklift is not needed since the incoming material is delivered by a courier
• The forklift is needed to unload the truck
Figure 20: Incoming when the forklift is not needed
If the forklift is not needed, the courier is sent to the incoming office where the incoming area worker collects the package and stores it in a closed area as shown in Figure 20. Then the incoming area worker looks for the delivery note of the package referring to the invoice document which is often placed inside the box itself.
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Later the delivery note is printed and the incoming is recorded through the delivery registration subprocess. All the packages delivered by a courier are considered closed orders. Finally, the warehouse worker contacts the competent department to inform it that the material ordered was received by Dayco. When the addressee of the delivery arrives, the warehouse worker makes him sign the delivery note and deliver the received material.
Figure 21: Incoming when the forklift is needed
If the forklift is needed to unload the truck (Figure 21) the incoming forklift driver signs the delivery note for acknowledgment and invites the truck driver to deliver the transport documents to the incoming office where he should also sign the register recording the arrival time and the license plate.
At this point, the process is split. On one hand, the truck will enter the gate and all the unloading procedures will take place, on the other hand, the office will handle the delivery note.
After the truck enters the gate and the loading area is opened, the incoming area forklift driver verifies that the number of packages in the truck is coherent with what is declared by the transportation documents.
If the data are not coherent the forklift driver communicates the non-conformity to the incoming office where the supervisor contacts the supply chain if the delivery should be accepted or not.
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The supply chain department can give two different answers (Figure 22):
• Accept the delivery
• Accept part of the delivery
In the first case, the supplier is asked to correct the delivery note through the document correction subprocess, a note is written on the transportation document and the truck driver signs it for acknowledgment.
The supply chain department can decide to accept a part of the delivery in the case that the truck contains material with different delivery notes. If the truck is loaded with three pallets of material A with the delivery note A and 4 pallets of material B with the delivery note B, Dayco can decide to accept just the material A listed in the delivery note A and to reject the material B listed in the delivery note B. In any case, Dayco cannot accept two pallets of A and reject the last one, receiving just part of the goods listed in the delivery note A. If part of the truckload is accepted, the incoming area supervisor communicates to the forklift driver which pallets must be unloaded and then write a note on the delivery note to register what happened. If the supply chain department is late in answering the incoming area supervisor accepts the delivery, because is better to have more material in the warehouse than cause downtime of production.
Figure 22: Decision process
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While the tasks just explained are performed, the incoming area worker stamps the delivery notes as subject to inspection and registers them on a book specifying date, supplier and document identification number.
Then the incoming area worker read all useful information from the delivery note and, if necessary, ask the competent department to be present during the unloading of the truck to verify the integrity of packages and to react rapidly in case of problems. This passage is often done for high-cost or fragile goods such as machinery.
Later, the warehouse worker verifies that the delivery was scheduled for that period through the check delivery schedule subprocess. If the delivery was scheduled the process proceed smoothly, otherwise the incoming area supervisor must ask the supply chain department if to accept or reject the delivery. The supply chain department can give three different answers:
• Reject the delivery
• Accept part of the delivery
• Accept the delivery
If the delivery is rejected, the material must be registered in the information system as delivered and rejected through the delivery registration subprocess and all documents must be filed in the Activeinfo archive before the process end. If part of the material is accepted, according to what was explained before, the quantity to unload is communicated to the forklift driver and a note is written in the transportation documents. If the delivery is accepted, a note is written in the delivery note for acknowledgment.
Figure 23: Integrity check and unloading
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When the delivery or part of it is accepted, the truck driver opens the truck and, before the material could be unloaded, a first integrity check is done by the forklift driver through the check integrity subprocess (Figure 23). If the delivery is rejected due to severe damage, the delivery rejection is registered with the delivery registration subprocess and all documents are filed in the Activeinfo archive before the process end.
If the delivery is accepted, the incoming area forklift driver unloads the truck positioning the pallets in front of the warehouse. When the material is well visible a second integrity check is performed.
Again, the delivery can be rejected: the document must be recorded through the delivery rejection subprocess and filed in the Activeinfo database before the process ends. Moreover, it is possible to ask the truck driver if the damaged material can be directly loaded up in his truck to be shipped back to the supplier through the load-up subprocess. If the material is loaded up, there are no other tasks to be performed, if the goods cannot be loaded up a return shipping is arranged: the incoming area supervisor calls the supplier to inform him to arrange the transport of returned material. In case of supplier delay, the supervisor arranges the transport on his own and notifies the supplier and the administration department to charge the transport cost to the supplier. Then, the documents are registered in the Activeinfo database and the pallets are correctly allocated until the truck for the return arrives.
Figure 24: Load up procedure
When the integrity check is concluded, the forklift driver verifies if there is some material that the truck should collect as illustrated in Figure 24. Such goods can be empty packaging that must be
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given back to the supplier or a scheduled return of material. If this is the case, the pallets are loaded up in the truck by the forklift driver who makes the truck driver sign the shipping note. After, the incoming area worker will register the note.
Figure 25: End of unloading
After the eventual load-up operation is performed, the forklift driver sent the truck driver to the incoming office to collect the transportation documents and communicate the end of the unloading task to the incoming area worker (Figure 25). While the forklift driver moves the received material to the identification area inside the warehouse, the incoming area worker delivers the transportation documents and shows the exit to the truck driver.
Figure 26: Delivery registration and label print
Once the unloading operations are completed, the incoming area worker registers the delivery through the delivery registration subprocess. The system then prints the labels that must be attached to the received material before the allocation in the warehouse. The warehouse worker takes the labels and goes to the identification area of the warehouse where he can identify the material and verify that the system printed the correct number of labels (Figure 26).
It could happen that the system printed fewer labels than needed. This is due to the fact that AS 400 read the quantity received and the packaging used, but the supplier can change the quantity on
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each pallet without informing Dayco and, since it is the first time that the warehouse worker sees the pallets, he can make a mistake in registering the packaging. If this is the case, the warehouse worker should go back to the desk and unpack the labels in the information system specifying the quantity of goods for each pallet.
Figure 27: Label process
The received material could be divided into two categories as illustrated in Figure 27:
• Free pass material: high rotation material which, due to the high quantity and frequent delivery, does not undergo the quality department controls
• Non free pass material: lower rotation material that must be approved by the quality department before being used
If the goods delivered are free pass material, the warehouse worker attaches the label to the pallet horizontally to signal to the forklift driver that the goods can be allocated in the raw material warehouse.
If the material is no free pass or if the pallet is a mixed package, the label is vertically attached to the pallet.
The material that must be approved by the quality department is then moved to the waiting area by the forklift driver and a notification is sent to the competent quality department worker. The quality department can then choose to approve the material without inspecting it or to check it. In the second case, the material is moved to the quality warehouse. Last, the material can be approved and consequently allocated, or it can be rejected and the incoming area supervisor must arrange the return. If the goods are urgently needed by the production department, the production forklift driver is asked to move the pallet to the production line.
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On the other side, the mixed packages are positioned to the mixed package area where they will be unpacked before being allocated.
Figure 28: End of receiving process
While the incoming area worker archive paper documents and file them on the Activeinfo database (Figure 28), the forklift driver allocates the goods in the raw material warehouse or in the production warehouse area if the product is immediately needed. So the process ends here.
Special attention should be paid to the allocation task, where the forklift driver reads the label and decide where to allocate the package. Using the forklift, he moves the package to the designed allocation then he scans the label barcode, scans the allocation barcode and he positions the package in the allocation scanned.
3.2.1.1 Document correction subprocess
As illustrated in Figure 29, when the incoming area supervisor asks the supplier to correct the delivery note, he can receive a positive or a negative answer according to the supplier's will. In the case the delivery note will not be corrected or if the correction will take too much time, the supervisor writes a note on the delivery note to register the differences with respect to real truckload or destination.
Last, the truck driver is asked to sign the document for acknowledging the delivery.
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Figure 29: Document correction subprocess
3.2.1.2 Check integrity subprocess
If the material received is damaged (Figure 30), we can distinguish two cases. If the material received is packaging, the packaging area forklift driver writes a note on the transport documents and informs the supply chain about the status of the goods.
In the case the truckload is raw material, the incoming area forklift driver informs the incoming supervisor who takes picture of the material to prove the damage.
Figure 30: Check integrity subprocess
The pictures are then sent to the supply chain and quality departments (Figure 31). Each department evaluates the situation to decide if to accept or deny the delivery and communicate its decision to the incoming area supervisor.
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Figure 31: Decisional process in the check integrity subprocess
To proceed with the process, the two answers must be coherent, otherwise the supervisor must ask for a clear answer to both departments which should communicate one with each other to make a decision.
Figure 32: End of check integrity subprocess
If the answer from the supply chain and the quality departments are late, the incoming supervisor is obliged to make a decision on his own to not interrupt all the activity in the incoming area since just one truck at a time can enter the gate (Figure 32).
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3.2.1.3 Delivery registration subprocess
When the delivery must be recorded (Figure 33) the delivery note number is registered in the information system. If the warehouse worker cannot find the note number, he must check again the delivery note or try to find it. Not all delivery notes are clear to be read.
Figure 33: Delivery registration subprocess start
If the delivery comes from a close order, this should be specified in the delivery note itself, the warehouse worker enters in AS 400 the order or the supplier id to select in the list of closed orders the correct one. Sometimes the received material might be not listed in the closed order group, this is a procedural error of the purchasing department so the incoming area supervisor must notify the disruption to have it fixed.
If the received material comes from an open order, the incoming area worker can search in the list of traveling orders to recover all the data needed, otherwise he can enter manually the data as supplier ID, delivery note ID, delivery note data of emission, delivery date, total quantity of material received. If the system signals that no order was made to the supplier, the registration can be forced.
This can happen because sometimes suppliers try to anticipate the following month's delivery for accounting reasons.
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Figure 34: Container registration
Once the material is registered, it is time to record the packaging as indicated in Figure 34. Usually, the number and the type of packaging are indicated on the delivery note, but to be sure and avoid the unpacking of the labels, the warehouse worker can verify the real packaging used going to the identification area. Often the registration of packaging is done relying entirely on the incoming area worker memory since each supplier usually ships similar packaging for the same item.
If the system does not allow registering the packaging together with the material, the containers must be manually recorded.
When the recording operations are concluded the system prints a small label that must be attached to the delivery note. This is useful to file the documents in the Activeinfo database.
If an amendment or a return procedure must be registered (Figure 35), the incoming warehouse worker registers it in the system and notify it to the administration department and the supplier or contracting company.
Figure 35: Amendment registration
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3.2.1.4 Check delivery schedule subprocess
To check if the material arrived in Dayco is scheduled for the current period, a different procedure is performed on the information system depending on the type of order as shown in Figure 36. If the order is close, it is sufficient to enter the order id or the supplier id to verify the schedule.
Otherwise, if the order is open the incoming area worker must first check the traveling information and if no data can be found, he enters the main information of the delivery note to search for the material manually. The data could be:
• Supplier id
• Delivery note id
• Delivery note data of emission
• Quantity of material delivered
Figure 36: Check delivery schedule subprocess
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3.2.1.5 Load up subprocess
When a damaged delivery already unloaded is rejected, it is possible to ask the truck driver to load up again the material to bring it back to the supplier as illustrated in Figure 37. If the truck driver gives a positive answer, the material is loaded up again, otherwise the material will be managed in a different way. If the truck driver is late in answering the goods are not loaded up again but Kept in the Dayco warehouse.
Figure 37: Load up subprocess
3.2.2 Return request
When a department, usually the quality, requests that a certain material is returned to the supplier (Figure 38), the incoming area supervisor contacts the supplier to arrange the collection. Then the return is registered in the information system and, after the supplier truck arrives, the material is prepared for the shipping and loaded on the truck.
During the registration, the information about the material might be lost and the incoming area supervisor must spend time looking for it by contacting the quality department or whoever can have information. If the supervisor is not able to find any, he must identify and count the items.
Figure 38: Return request
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3.2.3 Data conversion and triangulation
Triangulation operation occurs when raw material is purchased by the Dayco Ivrea plant, but it is delivered to a contractor or another Dayco plant (Figure 39). In this case, when the goods are received the contractor sent to Ivrea plant the copy of the stamped delivery note as proof of the transaction.
When the incoming area supervisor receives the stamped delivery note he registers the material in the warehouse dedicated to the contractors through the delivery registration subprocess.
Data conversions could be required by a Dayco department or by a contractor, when the request is received the incoming area supervisor changes the warehouse destination of the material as required.
Figure 39: Data conversion and triangulation
3.2.4 Other subprocesses
Since the packaging warehouse is distant from the production lines, an area of the warehouse near the production warehouse is employed to store a small quantity of high-rotation packaging. This is done to facilitate production area forklift drivers and to avoid downtime in production. The packaging area forklift driver, from the start of his shift, periodically verifies that the packaging area near production is well provided with all the material needed, if it is not the case he collects the packaging in the packaging warehouse and then bring it near production area (Figure 40).
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Figure 40: Verify the availability of packaging
Periodically, an inventory of the material in whatever warehouse of the Dayco plan can be requested by the supply chain department or by a customer as illustrated in Figure 41.
Figure 41: Inventory
3.3 Production warehouse
The process in the production warehouse is triggered in two ways. The prototype department can place an order of material from the warehouse, or an item production can be scheduled and so the material is needed on the production line.
3.3.1 Prototype department order
When the prototype department makes an order requiring some goods from the warehouse, the production forklift driver prepares the ordered material and does the picking operation (Figure 42).
The picking operation is needed because the prototypes department usually asks for a small number of goods that must be picked from bigger boxes. Once the goods are ready, the forklift driver delivers them to the prototype department.
Figure 42: Prototype department order
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3.3.1.1 Prepare order subprocess
To prepare the order, the production forklift driver must first print the order. If the material is present in the kanban area the process ends because the goods are already in charge of the production department.
If the goods are stored in the raw material warehouse, the production forklift driver collects the material and positions it near the computer area in the warehouse as illustrated in Figure 43. If the material is stocked in the narrow aisle forklift area, the forklift driver assigned to that area is appointed to collect the pallets. If the narrow aisle forklift driver is not available, the production forklift driver who is preparing the order collects the material and positions it near the computer area.
Figure 43: Prepare order subprocess with material in the raw material warehouse
Later, the warehouse worker registers the movement of the goods from the raw material warehouse to the production warehouse and the new yellow labels are printed. The withe labels of the raw material warehouse are then substituted with the new ones.
If the material is immediately needed by the production or by the prototype department, the process end, otherwise the pallets are positioned in the kanban area (Figure 44).
Figure 44: End of prepare order subprocess
